MSD targets $2bn Hansoh GLP-1RA asset for obesity

Merck & Co (MSD) has recently signed an exclusive licensing agreement with Hansoh Pharma, a Chinese biopharmaceutical company, to advance a new oral medication targeting the weight loss market. The agreement entails MSD making an initial payment of $112 million to Hansoh for the development, manufacturing, and commercialization of a preclinical candidate known as HS-10535. Additionally, Hansoh could earn up to $1.9 billion in milestone payments, along with royalties from sales. While MSD will oversee the global operations of the drug, Hansoh retains the right to solely market or co-promote HS-10535 within China.

This collaboration highlights the growing trend of developing oral treatments for weight loss, as they present a more convenient alternative to injectable options. Currently, weight loss medications like Novo Nordisk’s Wegovy and Eli Lilly’s Mounjaro are administered through injectable pens. In contrast, Hansoh's orally administered candidate aims to provide easier access for patients, potentially increasing adherence to treatment.

Despite entering the obesity market later than some of its competitors, MSD is positioning itself strategically by partnering with Hansoh. Eli Lilly's oral GLP-1RA candidate, orforglipron, has already shown promising results in Phase II trials, and Pfizer is also in the race with its weight loss pill, danuglipron, which successfully achieved its primary endpoint in a Phase IIb trial last year. Though HS-10535 is still in the preclinical phase, MSD’s involvement signifies its commitment to entering this booming market, which is projected to expand at an annual growth rate of 31.3%, reaching $37.1 billion across seven major markets by 2031.

MSD's ambitions for HS-10535 extend beyond weight loss. The company is exploring the drug’s potential to address a broader range of health issues. Currently, MSD is conducting Phase II trials for another GLP-1RA/glucagon receptor co-agonist, efinopegdutide, which targets metabolic dysfunction-associated steatohepatitis (MASH). HS-10535 could possibly extend treatment options to additional conditions, providing wider therapeutic coverage.

Dr. Dean Y. Li, President of MSD's research laboratories, expressed optimism about the potential of HS-10535, highlighting its capability to offer cardiometabolic benefits beyond mere weight reduction. This move is part of MSD's broader strategy to bolster its portfolio ahead of the patent expiration for its blockbuster drug, Keytruda. This year alone, MSD has made significant financial commitments, including a $1.9 billion deal with Mestag Therapeutics, focusing on fibroblast therapies, and a $1.3 billion acquisition of EyeBio.

MSD’s latest agreement with Hansoh underscores a wider trend of Western pharmaceutical companies collaborating with Chinese firms to access innovative preclinical assets. For example, AstraZeneca entered a similar agreement in November 2023 with Eccogene, another Chinese company, in a deal valued at up to $2.01 billion. As the global demand for effective weight loss treatments continues to rise, these strategic partnerships are likely to become increasingly important in the pharmaceutical industry’s efforts to address obesity and related health concerns.